The Labour Ministry has asked the Reserve Bank of India (RBI) to form a panel headed by a former Deputy Governor of the central bank to look into a proposal of creating a Workers' Bank using Employees’ Provident Fund (EPF).
“We need to know whether the proposal to set up a Workers’ Bank is feasible or not. We have taken up the matter with the RBI to nominate a retired Deputy Governor to seek opinion on the matter. A reminder was also sent to the RBI in February this year,” a senior Labour Ministry official said on condition of anonymity.
The proposal was mooted by the trade unions about a decade ago and has been discussed by Labour Ministry and Employees’ Provident Fund Organisation (EPFO) for several years now.
In 2004, the Congress-affiliated Indian National Trade Union Congress (Intuc) had first submitted a theme paper to the government on setting up ‘Workers’ Capital Trust’ to improve the earnings of Employees’ Provident Fund Organisation (EPFO) by investing its corpus in various instruments.
The idea was modelled on similar experiences in countries like Canada, Netherland, Switzerland and South Africa where a collective pension fund system invests worker’s savings in equities of domestic and global markets.
As on 31 March 2015, EPFO’s total corpus stood at Rs.6.34 lakh crore. Various committees set up to review the proposal had suggested that EPFO should concentrate on its core activities and were not in favour of the Workers’ Bank. However, the idea was revived after the National Democratic Alliance (NDA) government took charge in May 2014.
The Labour Ministry has also sought the opinion of Department of Financial Services in the Finance Ministry on the proposal.
